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HR Outsourcing Services: A Cost-Effective Way to Comply with Singapore Employment Act

HR Outsourcing Services: A Cost-Effective Way to Comply with Singapore Employment Act


Singapore employment laws mandate all business owners and employers to comply with certain statutory obligations while hiring, supervising, or terminating employees as a part of HR Statutory Compliance in Singapore.

The Employment Laws in Singapore established in 1968 is the primary labour legislation in the country governing employer and employee relations in an organization. Safeguarding working conditions for employees and maintaining employment standards and practices are the primary objectives of the employment act. The Act stipulating Legal Compliances in HR has been established encompassing the entire employment process starting from appointment to retirement or termination of individual employees.

An efficient Human Resources (HR) department is of vital importance for every company. However, the budget to staff an in-house human resources department is often an issue with SMEs and startups and in that situation, outsourcing a professional Payroll and HR Services in Singapore allows companies to transfer some or all of the HR-related workload to a professional organization that can take care of everything from payroll, taxes to benefits administration.

Why is Employment Law Important in Singapore?

Singapore’s employment law is intertwined with the country’s economy as it ensures a happy and productive human capital that keeps the economy moving and flourishing without any labour unrest.

Implementing fair and best employment practices often open the door to opportunities for creativity and innovation taking companies to much higher levels without huge investments.

All companies in Singapore must be well aware of all the requirements of Legal HR Statutory Compliances as any non-compliance may lead to penalties including fines up to SGD 5,000, 6 months imprisonment, or both. Subsequent offences attract more severe penalties; a fine increasing to SGD 10,000, imprisonment for a year or both. Guide to Singapore Employment Act issued by the Ministry of Manpower can be very helpful for HR awareness in your company and avoidance of penalties and poor reputation.

Who all Come Under the Singapore Employment Act?

Both local and foreign workers that work full-time, part-time, or temporarily are covered under the Singapore Employment act. All employees regardless of how they are paid e.g. monthly, daily, hourly, or on piece rates come under the purview of this act.

Singapore Labour Law for Foreign Workers mainly covers regulatory requirements of work passes and enforcement for infringements and offences.

The Employment Act, however, does not apply to a few categories including Civil servants employed in the Accounting and Corporate Regulatory Authority (ACRA), Monetary Authority of Singapore (MAS), and other statutory boards, Domestic workers, Seafarers etc. and professionals with specialised skills including doctors, lawyers, accountants.

Employment contract

An employment contract is an agreement between the employer and employee and is a legal document. It documents important aspects of employment and includes the following.

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Why is HR Outsourcing the Best Compliance Strategy for Employers?

You can hire a Manager and an HR team to ensure compliance with the employment processes including management of employee wages and benefits, recruitment, training, performance reviews and organizational changes arising out of amendments to the employment law. However, this is usually a costly proposition, especially for SMEs and startups.

HR outsourcing, however, can be very cost-effective, saving you a lot of money in hiring and rehiring HR professionals and other administrative costs. You can get expert services from top HR professionals and free your HR staff from drafting labour documents and employment contracts. Outsourcing Payroll can take a lot of load off your shoulder and enhance the growth and profitability of your organization.

Ensuring error-free payrolls for your workers is one of the most important tasks for any HR department and services can help you with

  1. The maintenance of the payroll file for each employee
  2. Computation of net salary and contribution for both employer and employee to CPF
  3. Creating monthly payroll reports for management’s review
  4. Filing returns of individual employee’s remuneration, Form IR8A and IR8S
  5. Assisting in making payments to employees and government authorities
  6. Providing advisory on Compliance Requirements on employment, payroll and CPF matters
  7. Processing bonuses and increments
  8. Preparing IR21 for foreigners departing Singapore on cessation of employment
The Takeaway

The Employment Act in Singapore stipulates several legal requirements that your company needs to comply with during the processes of hiring, managing, or terminating employees. You can satisfactorily meet all HR Statutory Compliance in Singapore and avoid penalties, once you outsource the services of a reputed HR Advisory Singapore letting you focus entirely on your core business activities.

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